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Prolongation of the loan

 

Everyone who decides to get a loan will be sure that they can repay the loan to the penny, but life situations and financial difficulties prevent it. Financial difficulties can arise absolutely because of everything, it can be unforeseen expenses, delayed salaries and more. Of course, none of the borrowers wants to receive a penalty for late loan, so the only normal solution would be to extend the loan.

Loan extension: what is it?

Loan extension: what is it?

Loan extension is a service that enables the client to extend the loan repayment terms. Such a procedure is established either by the creditor or by agreement of both parties. Such an operation occurs either for free, or the borrower will need to pay a certain percentage depending on the terms of the contract and the financial institution.

In most banks, the extension will be available to customers during the entire lending period, some credit organizations allow you to issue a prolongation even after the expiration of the loan period.

The difference between extension and restructuring

The difference between extension and restructuring

Many borrowers and those who are not familiar with these terms may confuse the concepts of “prolongation” and “restructuring,” quite a few who think that these are the same concepts, but this is not entirely true.

First of all, it is worthwhile to understand that a restructuring is formalized only after the borrower has delayed and cannot timely pay not only the loan, but also the penalties for it. Here, the client may be asked to split the entire loan amount into equal parts and pay them out gradually.

Many credit organizations may not have such a function in their arsenal, so it is important to carefully read all the terms of the loan agreement before signing it.

As for the loan extension, this procedure is available in almost all credit organizations is no exception. Here the client has the opportunity to apply for a prolongation for free, but he will need to pay all the interest for using the loan before that. Despite the fact that the interest here is small, it will not be difficult for the client to complete such a task.

To apply for a loan extension, the client just needs to contact the service consultant and he will tell you what needs to be filled in to receive this function.

Benefit from prolongation

Benefit from prolongation

When applying for a prolongation, both the borrower and the lender himself can benefit from this procedure. What is it and how many beneficial advantages for the client? Here are some key benefits to applying for a prolongation to a borrower:

  • Due to the extension of the loan, the client not only does not allow delay, but also fines, which cannot but rejoice;
  • To extend the payment period and solve financial issues slowly and correctly, because it also will not allow fines or delays in the loan;
  • When applying for a prolongation, the client not only preserves his finances, but also his credit history with a positive status and with the absence of arrears and debts;
  • First of all, by mutual agreement and peaceful agreement, the client will maintain friendly relations with the creditor, which is important;
  • Here, the client automatically gets rid of intrusive letters and calls about the request to pay the loan on time;
  • In addition to avoiding fines and penalties, a prolonged borrower can avoid lawsuits.

It can be concluded that for the borrower the extension of the loan is only the positive aspects that make it possible to stabilize the financial condition and not worsen the situation when there are not enough funds for timely payment of the loan.

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